Douglas Agbetsiafa is Professor of Economics
and Chair of the Economics Area at Indiana University South Bend (IUSB). He holds a PhD in Economics from the
University of Notre Dame. That PhD also contains wording that is similar to earlier published authors.

From Agbetsiafa publication, page 318:

The growth of fiscal deficits and the resulting increase in government
debt have attracted the attention of policy makers and financial market analysts.
Theoretical affects of borrowed deficits are wide ranging and substantial. A very
strong hypothesis: predictable changes in government debt do not affect any other
variable in the economy. As a first approximation, suppose that changes in government
debt do not affect private wealth if agents forecast the implied substitution of
future taxes for current taxes as in some of Barro's models (1974). Faster growth
of real debt will not increase the growth the growth of spending
or the inflation rate because agents do not perceive any improvement in their situation
when they hold more debt. Instead, debt supply is accompanied by increased private
demand for debt; as a result, there is no effect on interest rates if greater
debt is issued to the public.

Compare this to:

.. very strong hypothesis: predictable changes in government
debt do not affect any other variable in the economy. As a first approximation,
suppose that changes in government debt do not affect private wealth if agents forecast
the implied substitution of future taxes for current taxes as in some of Barro's
models (1974) . Faster growth of
real debt will not increase the growth of spending or the inflation rate because
agents do not perceive any improvement in their situation when they hold more debt.
Increased debt supply is accompanied by increased private demand for debt; as a
result, there is no effect on interest rates of greater debt issued to the public.

Rational behavior by the central bank implies that debt issued
to the public has no effect on the central bank behavior. If the amount of
privately held debt is a matter of indifference to private agents, then presumably
any changes in that debt do not generate costs or benefits to the monetary
authorities for different behavior. As a result, if government debt is not net
wealth and the political process reflects this without misconceptions. Then there
is no reason to expect the central bank purchases to reflect interest rate
effects that are nonexistent. This does not necessarily deny that the central banks
may engage in even-keeling operations and stabilize interest rates as bonds issued
and distributed in the economy.

Compare this to:

"Rational" behavior by the
Federal Reserve implies that debt issued to the public has no affect on the
Federal Reserve's behavior. If the amount of privately-held debt is a matter of indifference to private agents,
the presumably any changes in that debt do not generate costs or benefits to the
Federal Reserve for different behavior. As a result, if government debt is not net wealth and the political
process reflects this without misconceptions, then there is no reason to expect
Federal Reserve purchases to reflect interest-rate effects that are nonexistent.
This does not necessarily deny that the Federal Reserve may engage in even-keeling
operations and stabilize interest rates as bonds are issued and distributed in
the economy.

This imbalance forces nominal interest rates to rise. On the
other hand, the Ricardian hypothesis argues that neither consumption nor interest
rates arc affected by the stock of government debt or by the deficit. In an extensive
survey, Seater (1993) concludes.that the Ricardian equivalence is approximately
consistent with the data.

Compare this to:

This result is consistent with the Ricardian hypothesis that neither
consumption nor interest rates are affected by the stock of government debt or
by the deficit. In an extensive survey, Seater (1993) also concludes that the
Ricardian hypothesis is approximately consistent with the data.

Attempts to use quarterly data to capture the effects of fiscal
deficits on interest rates have been plagued by anomalies. First, there exists theoretically
surprising results such as larger deficits causing lower interest rates
(Plosser 1982; Evans 1985, 1986, 1987a and b; and U.S. Treasure Department
1984).Secondly, there is a lack of
clarity as to how deficits should be defined (Eiser 1986, 1989a, b and c;
Gramlich 1989). Finally, there is the problem of parameter instability in the models
used (Swamy, Kolluri, and Singamessetti 1990).

Compare this to:

ATTEMPTS TO USE QUARTERLY AND ANNUAL DATA to capture the
effect of deficits on interest rates have been plagued by a number of
anomalies. First, and most importantly, there exists theoretically surprising
results such as larger deficits causing lower interest rates (Plosser 1982;
Evans 1985, I9S6. 1987a and b; and U.S. Treasury Department 1984). Secondly,
there is a lack of clarity as to how deficits should be defined (Eisner 1986, 1989a-b
and c; Gramlich 1989), Finally, there is the problem of parameter instability
in the models used (Swamy, Kolluri. and Singamsetti 1990).

This posting shows similar wording in the following
publication by Douglas Abetsiafa and the works of other, earlier published authors:

Agbetsiafa. Douglas K., "Growth Implications
of Financial Intermediation Under Information Asymmetry", Trends in Modern Business, Proceedings of the Academy of Business Administration. (February 1995): 459-467.

Douglas Agbetsiafa is Professor of Economics and Chair of the Economics Area at Indiana University South Bend (IUSB). He holds a PhD in Economics from the University of Notre Dame. That PhD also contains wording that is similar to earlier published authors.

From Agbetsiafa publication, page 460:

Other studies on the macroeconomic implications
of financial intermediation incorporate many of the earlier ideas of
Gurley-Shaw and others, and stress the role of these institutions in overcoming
imperfections in markets which transfer funds between savers and investors.

Compare this to:

Current research on the macroeconomic implications of financial
intermediation incorporates many of the earlier ideas of Gurley and Shaw and
others. It stresses the role of these institutions in overcoming imperfections
in markets which transfer funds between savers and investors.

Diamond (1984) provides an early example of how
it is possible to formally explain intermediary-like institutions. He considers
a setting with an information structure similar to Townsend (1978) costly state
verification model, in which lenders cannot freely observe the returns to
borrowers's [sic] projects.

Compare this to:

Diamond (1984) provides an early example of how it is possible to
formally explain intermediary-like institutions. He considers a setting with an
information structure similar to the one in Townsend's costly state
verification model: lenders cannot freely observe the returns to borrowers'
projects.

Diamond then shows that, in order w economize on
monitoring costs, it is optimal for a competitive financial institution to
channel funds between savers and borrowers. Furthermore, the structure of the
financial intermediaries which arise endogenously, do share basic features of a
conventional financial intermediary.

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Diamond then proves that, in order to economize on monitoring costs, it
is optimal for a competitive financial institution to channel funds between
savers and borrowers. Further, the structure of this institution-which arises
endogenously-shares basic features of a conventional intermediary.

They write loan contracts with individual
borrowers, and monitor borrowers who default; hold a diversified portfolio; and
transform assets for savers. Diamond goes on to show that the latter two
characteristics arise to solve a potential incentive problem between the
financial institutions and their depositors.

Compare this to:

… loan contracts with individual borrowers and monitors borrowers who
default; (ii) holds a heavily diversified portfolio; (iii) transforms assets
for savers-in …Diamond shows that the latter two characteristics arise to solve
a potential incentive problem between the financial institution and its
depositors.

Williamson (1986) uses a similar environment to
illustrate how intermediation and credit rationing may be interrelated
phenomenon. Rationing emerges in his framework because costly state
verification adds a premium to loan rates, intermediation arises simultaneously
as a way to minimize this premium, and thus, minimize rationing by economizing
on monitoring costs.

Compare this to:

For example, Williamson (1986) uses a similar environment to illustrate
how intermediation and credit rationing may be inter- related phenomena.
Rationing emerges in his framework because costly state verification adds a
premium to loan rates (see the previous section); intermediation arises
simultaneously as way to minimize this premium-and thus minimize rationing-by
economizing on monitoring costs, in analogy to Diamond's argument.

One striking feature of the behavioral theories
presented thus far, is that intermediation works well, in fact so well. that
taking the models literally, a laissez-faire policy toward financial intermediaries
is optimal.

Compare this to:

One striking feature of the behavioral theories presented thus far is
that inter- mediation works extremely well, so well that-taking the models
literally-a laissez-faire policy toward financial intermediaries is optimal.

On the other hand, Bhattacharya and Gale (1987)
make a case for government intervention to insure smooth flow of liquidity
without appealing to arbitrary restrictions on private contracts. Implicit
assumption of their paper is that any case for government credit market
intervention, probably rests on the absence of well functioning secondary
markets for the assets of the relevant financial institutions.

Compare this to:

… Bhattacharya and Gale (1987) make a case for government intervention
to insure the smooth flow of liquidity, without appealing to arbitrary
restrictions on private contracts. … Any case for government intervention into
particular forms of intermediation probably rests on the absence of
well-functioning secondary markets for the assets of the relevant financial
institutions.

But Hoff and Stiglitz (1990) have questioned the
extent of exploitation, suggesting instead, that the high rates are a result of
the high rates of default, high cost of screening loan applicants and of
pursuing delinquent borrowers. Because of the importance of local information,
moneylenders' loans are generally concentrated within a narrow geographic area.
The inability to diversify means that the risks they bear are higher, and the
lending market carries high risk premia. Thus, both in the rates charged and
the institutional arrangements by which loans are extended, traditional moneylending
differs markedly from conventional banking institutions.

Compare this to:

More recent views have questioned the extent of exploitation,
suggesting that the high rates are a result of three factors: the high rates of
default, the high correlations among defaults, and the high cost of screening
loan applicants and pursuing delinquent borrowers.' Because of the importance
of local information, moneylenders' loans are generally concentrated within a
single geographical area; the inability to diversify means that the risks they
must bear are large.

Both in the rates charged and the institutional arrangements by which
loans are extended, traditional moneylending appears markedly different from modern
banking institutions of the form found in more developed economies.

Many governments, supported by multilateral and
bilateral aid agencies, have devoted considerable resources to supplying credit
in a myriad of institutional settings. This intervention which has taken various
forms including outright government ownership of financial institutions; the
setting up of specific institutions (development

Compare this to:

Many governments, supported by multilateral and bilateral aid
agencies, have devoted considerable resources to supplying cheap credit to
farmers in a myriad of institutional settings.

The local moneylenders have an important
advantage over conventional financial institutions in
that they have detailed knowledge of
borrowers, can separate out
high and low-riskborrowers and charge them
appropriate interest rates,
and are able to monitor borrowers more
effectively.

Compare this to:

But another part of the reason may be that the local moneylenders have
one important advantage over the formal institutions: they have more detailed
knowledge of the borrowers. They therefore can separate out high-risk and
low-risk borrowers and charge them appropriate interest rates; …